Energy Exchange: California

By Adam Peltz

Today, the Interstate Oil and Gas Compact Commission and the Ground Water Protection Council published a new report entitled “Underground Gas Storage Regulatory Considerations: A Guide for State and Federal Regulatory Agencies.” Like the title says, the report helps regulators make decisions that will ultimately make gas storage facilities across the country safer and more secure.

Gas storage reached many Americans’ attention in the aftermath of the major leak at the Aliso Canyon Storage Facility, which forced thousands of families to evacuate their homes after a massive leak caused more than 100,000 tons of methane to escape into the air.

It came to light that the various protections for gas storage facilities were, in many cases, skimpy and outdated. With more than 400 gas storage facilities across the country, this not only threatens our health and environment but also our energy supply. More than a third of our nation’s electricity comes from natural gas and the majority of American households depend on it for cooking and hot water. If our storage facilities aren’t up to snuff, we risk disrupting that energy supply – exactly what occurred in Aliso Canyon.

In order to help states and other jurisdictions — like the federal Pipeline and Hazardous Materials Safety Administration — make smart decisions about updating their programs, the two state oil and gas regulatory associations teamed up to write this guide, and recruited dozens of experts from across government, industry, academia, and the non-profit world (including EDF) to help. The guide is comprehensive, covering essential topics like well construction and conversion, ongoing integrity testing, and leak detection.

This guide (in addition to recommendations from the Department of Energy) is an invaluable resources for states and other agencies looking to upgrade their gas storage rules – which, in the spirit of a process of continuous improvement, should ultimately be all of them.

Incidents like Aliso Canyon have happened all too frequently in recent decades, and industry self-regulation just is not cutting it anymore. Using this guide, states can design and refine programs to considerably reduce risks of leaks and other incidents and help keep gas storage working safely and reliably for all Americans.

By Lauren Navarro

California is a leader, and has earned that title – it is the largest state economy in the U.S. and the sixth-largest economy in the world.  Forward-thinking clean energy policies are the backbone of California’s prosperity, creating jobs and businesses for the state while cutting emissions. While the presidential administration assaults critical environmental protections nationwide, clean energy momentum is California’s leadership is committed and poised to move forward.

Energy policy drives economic growth

Most energy policy is done at the state level, reflecting that energy management is a fundamental concern for local residents and their livelihoods. How we make, move, and use power can create jobs and protect citizens’ rights to clean air and energy choice. The following bills currently in front of the California State Legislature illuminate the state’s path forward:

• SB 584 (De Leon) – This bill proposes increasing our current Renewable Portfolio Standard (RPS) – a requirement that utilities meet half of sales with clean, renewable energy sources – to 100 percent. While the means are still being determined, the ambitious spirit of 100 percent is clear. As California’s leaders consider how best to reach a 100 percent renewable energy goal, they should consider investing in and developing a variety of clean energy options that can ensure the grid stays clean, balanced, and reliable.
• SB 356 (Skinner) – This bill increase access to data about the whole energy system. Information makes it easier for businesses to develop and deploy new clean energy technologies and help bring clean-tech jobs to the forefront of our economy. It also ensures the state will have important information about the energy use of its buildings and properties.
• AB 726 (Holden) – This bill takes advantage of smart meter technologies by requiring utilities to notify customers before their bills get too high, thereby avoiding “unpleasant surprises.” Through this increase in information, customers can become more active participants in their energy usage and reduce their costs.
• SB 366 (Leyva) – SB 366 helps ensure all our communities are able to take part in the clean energy revolution and reap the benefits of lower electricity costs and cleaner air. Specifically, it clears the way for community solar projects in disadvantaged communities and supports well-paying green-collar jobs through local training programs. Unlocking community solar is a key to helping communities overcome physical and economic barriers (like not owning your home or not being able to afford the upfront costs of solar) to accessing clean energy.
• AB 1431 (Arambula) – AB 1431 will increase access and participation in energy efficiency, weatherization, and renewable energy programs for low-income, disadvantaged communities. It creates a comprehensive database to track program participation and a working group in which state agencies and stakeholders can exchange views on how to make these programs better and increase participation. This combination of data and dialogue will allow for a comprehensive analysis of all related state clean energy efforts.

In some ways, how we bring these resources onto the grid is as important as the resources themselves.

Big, bold benefits of renewable integration

Not only do renewables create clean-economy benefits, so does renewable integration. In some ways, how we bring these resources onto the grid is as important as the resources themselves. A thoughtful approach to incorporating increasing levels of renewables includes establishing a strong, diverse portfolio of clean energy resources.

California’s clean-energy leadership continues
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Each solution has environmental and economic benefits, and each works hand in hand with the RPS to create a totally clean energy system – functioning like two sides of the same coin. In California, we can and should develop clean technologies that will “back up” renewable generation, like automated demand response, time-of-use rates, and electricity storage, including the use of electric vehicle as batteries.  It also means looking beyond California’s borders and considering how the state can best sell our excess clean energy when we don’t need it, like our abundant midday solar, and buy cheap, clean energy from other states when the sun isn’t shining.

California clean-energy leadership continues

California is working hard to create an economy that runs fully on clean, renewable resources. That’s why our legislators should pursue these innovative policies. We know this action is more important now than ever. And no one is more ready to demonstrate how clean energy policy can be an economic boon than California.

Photo source: iStock/halbergman

By Jayant Kairam

More than 25 U.S. cities, 12 countries, and at least 89 companies have all committed to transition to 100 percent renewable energy. That’s because they all recognize the unstoppable potential clean energy has to create jobs, strengthen and protect the economy, and fight climate change.

Now, U.S. states are throwing their hats into the 100-percent renewable ring. California and Massachusetts have proposed plans to get there, while Hawaii has made the pledge. This 100-percent dream does not come from fantasy, but is actually the result of a number of coalescing factors.

Earth Day is our time to recognize what’s more: With the right mix of clean energy technologies and solutions, 100 percent renewable is 100 percent possible.

100 percent is possible

Cost competitive and scalable renewable energy has taken off over the past 10 to 20 years. The hungry solar market in California for example, has resulted in exponential growth of utility-scale and rooftop solar over the last decade, creating over 150,000 jobs throughout the Golden State.

Recently, California powered 40 percent of its midday energy demand with solar power. A steady stream of policy actions at the state and local level – timed with the dramatic drop in costs of renewables – have helped make this possible. Across the U.S., current RPS policies alone could result in these benefits:

• Renewables contributing 40 percent of total electricity generation in the U.S. by 2050;
• Reducing climate change-causing greenhouse gases and harmful air pollutants like SOx and NOx (which together form ozone) by 6 percent; and
• An almost 20 percent increase in jobs.

The bold inspiration, urgency, and benefit of 100 percent renewables is without question, but the pathway for getting there is less clear and will vary by state and region.

Making 100 percent work

Let’s take California as an example, especially since it is currently considering a 100 percent renewable portfolio standard. California’s electricity sector currently accounts for a fifth of the greenhouse gas emissions produced in the state. Thanks to legislation passed last year, the sector must reduce those emissions by 40 percent. The state’s current 50 percent RPS is a hugely important piece to achieving those reductions.

Yet, as California’s leaders consider higher RPS targets, they must simultaneously invest in and develop a variety of resource, policy, and market solutions to ensure the grid stays clean, balanced, and reliable.

This Earth Day, 100 percent clean energy is 100 percent possible
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These are clean energy resources that can even-out the variability of renewables, and use market mechanisms to create more competition and opportunity to serve energy demand with renewables throughout the day.

Smart policies, technology, and market tools are gaining traction around the country and offer some excellent examples of how to lay a foundation for an energy system powered by 100 percent clean resources.

Connecting Western grid management

The Western U.S. is full of expansive and diverse natural beauty. This translates into an impressive abundance of clean energy resources like wind, solar, geothermal, and hydro power.

The Western U.S. is full of expansive and diverse natural beauty. This translates into an impressive abundance of clean energy resources like wind, solar, geothermal, and hydro power. Capitalizing on the West’s resource and population footprint has been the driver for establishing a Western wide wholesale energy market.

Currently, 38 separate authorities manage the region’s electric grid. Connecting them could increase renewables, reduce pollution and wasted resources, save people money, and create jobs. One sign this would work is the current Energy Imbalance Market, a voluntary market for utilities to sell energy in real-time. It has expanded in recent years to include utilities in Nevada and Arizona, and there has been a noticeable improvement in California’s ability to put more of our renewables to use.

Solar + storage, and other tech

Hawaii was the first state in the nation to announce its plan to tackle a 100-percent RPS. Now the state is leveraging the dropping costs of solar-plus-storage technologies. Since the beginning of 2017, Kauai Electric Cooperative has won two such deals, a 13MW solar + 52MWh storage project with Tesla, and 28MW + 20MW storage project with Advanced Energy Solutions.

The price of the power from these projects is competitive and they’re directly aimed at using as much of the state’s high amount of solar power as possible.

Back on the mainland, a recent study of a 30 MW utility-scale solar plant equipped with smart inverters shows how clean resources can out-compete fossil fuel resources in operating the grid. Innovation is proof that renewables can be packaged to keep the grid reliable, allow operators to confidently maintain balance between supply and demand, and can alleviate concerns about the variability of renewables.

Using market signals

Distributed energy resources, like demand response and electric vehicles, can also provide important grid benefits in a variety of affordable ways. For example, time-of-use pricing (a type of demand response), could drive almost 8,000 GWh of energy demand to times of day when electricity is cheaply and cleanly powered by renewables.

Here’s what time-of-use pricing could do for California:

• Increase the amount of renewables we use by 10 percent;
• Avoid over 8 million tons of carbon emissions; and
• Save California energy customers, collectively, $700 million a year.

Using the power of price signals to incentivize electric vehicle charging when its cheapest and cleanest will help transform the growing fleets of clean vehicles into grid assets and help reduce pollution from the transportation sector, as well.

Why it matters

The California Independent System Operator (CAISO) – the organization charged with  balancing much  of California’s grid – recently reported they will have to shut off 6,000 to 8,000 MW of solar due to over-generation (when supply exceeds demand). High levels of curtailment, aka wasted renewable resources, are not the goal of a 100 percent renewable target. Nor are the severe ramps of energy demand that CAISO projects when increasing amounts of variable renewable resources shut down at the end of the day. Currently, fossil fuels like natural gas service much of that high demand.

We need to make sure the road to 100 percent is paved with clean energy resources that will help integrate, store, and use those renewables throughout the day and do so affordably.

This way, California and other states and nations can continue to prove how to balance vibrant economic growth with a strong commitment to climate and energy policy.

By Jim Marston

I’m going to stay positive this Earth Day. I know that’s not what you might expect from me this year, but really, when it comes to America’s shift to cleaner, smarter, advanced energy, there’s reason to be optimistic.

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1. Business is booming…

The advanced energy industry is booming. This includes everything from solar and wind power, to new energy innovations that are smarter and reduce our reliance on fossil fuels, like energy storage, electric vehicles, energy efficiency, and demand response.

The industry grew 29 percent in the last five years, and last year was worth $200 billion – about the same size as the pharmaceutical industry. Tesla – a sort of poster child for the advanced energy industry – just passed Ford Motor Company and General Motors in market cap. In fact, the company dropped “motors” from its name last year, a simple recognition that it’s far more than a car company.

1. …and that means jobs

There are now more than 3 million clean energy jobs in America, more than twice the number in fossil fuel extraction and electricity generation. Solar and wind industry jobs in particular have seen substantial growth in the past year, outpacing the rest of the U.S. economy 10 times over.

4 Reasons to Be Optimistic This Earth Day
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1. States are moving forward, with or without Washington

There’s no doubt President Trump’s assault on American clean energy and water protections are dangerous. (I said I was going to be positive. But you can read about President Trump’s toxic agenda and EDF’s fight against it here, here, and here.)

But around the country, there’s been significant progress in the states.

Illinois just enacted the Future Energy Jobs Act (FEJA), an economic development plan that puts clean energy jobs atop the state’s agenda. We estimate the FEJA will create thousands of new jobs and attract more than $12 billion in additional private investment.

California is conducting pilots of residential time-of-use electricity pricing, a new way of rewarding people for conserving energy during periods of high demand. These rates have been available to commercial customers for years, and California will soon roll them out to residential customers across the state.

Many states, including New York, Illinois, and Ohio, have embarked on aggressive reform of their energy policies that will modernize the electric grid and help make, move, and use energy more wisely, and with less pollution.

1. Most Americans want cleaner, smarter energy

That’s not an exaggeration. Across the country, conservative republicans and liberal democrats agree on renewable energy (if very little else):

• 83% of conservative republicans and 97% of liberal democrats favor more solar energy.
• 75% of conservative republicans and 93% of liberal democrats favor more wind energy.
• Among all groups, 89% want more solar, and 83% want more wind. The next most preferred energy option is more offshore drilling, at 45%. More than half oppose it.
• Nearly 60% oppose more coal mining.

In other words, the only place where clean energy looks partisan is Washington, D.C.

Stay positive and keep fighting

When it comes to fighting for clean air and water, I like to quote Dutch Meyer, who coached the TCU football team long before I went to school there. Environmental Defense Fund will “fight 'em until hell freezes over. And then we’ll fight 'em on the ice!”

But beyond defending our basic clean air and clean water protections, we have a long history of making progress even when progress seems impossible. The politics in Washington are discouraging, no doubt. But the world is moving toward a cleaner, smarter, advanced energy economy. And Donald Trump can’t stop it.

By Jamie Fine

Andrew Bilich, Clean Energy Analyst, contributed to this post.

Here in California, we know a thriving economy and forward-thinking clean energy policy go hand in hand. An important way for us to do this is to keep using cost-competitive renewable sources of energy to power our economy.

Transitioning California to a clean energy economy is good for our wallets, our lungs, and our workforce. Today, electricity from renewable sources like solar and wind are far cheaper than fossil fuel-based generation, and in California we’re powering our homes with nearly 30 percent clean resources. In fact, as the sun shined brightly last week more than half of California’s electricity was powered by renewable sources.

Yet, recent spikes in natural gas bills remind us why alongside renewables, we need to thoroughly green the grid and bring down costs for everybody. One way to accomplish these dual goals is to use our clean energy optimally by deploying efficient tools like TOU, or time-of-use pricing.

How One Clean Energy Solution Can Help Fix Both Price Shocks and Energy Waste
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TOU rates make electricity cheaper during times when electricity supply is well above demand.  In California, we’re bursting with solar-powered electricity when the sun is shining, so this is when prices will be lowest with TOU rates. Since cheaper off-peak prices are incentives for people to use sun-sourced electricity, these strategies that reduce bills will also reduce harmful pollution. When done right, TOU pricing will save Californians money, avoid pollution (from fossil-fueled power plants), and maximize the productivity of renewables without any extra cost.

Natural gas price shocks mean utilities need to do better

A string of recent articles have reported on Pacific Gas & Electric (PG&E) customers’ increases in their utility bills this winter. Gas is used primarily for heating, drying clothes, and cooking, and with California’s recent cold and wet winter, usage went up. These increases can especially burden customers who aren’t expecting them and force low-income households to decide between heating and other basic needs.

Recently, Californians have been experiencing the one-two punch of higher natural gas prices combined with higher usage. Not only were more Californians using more heat, but in August 2016, PG&E hiked natural gas prices by 13 percent. Additionally, the utility recently has raised rates for consumer electricity. According to a PG&E spokeswoman quoted in this article, from December 2015 to December 2016 PG&E customers saw a 21 percent average increase in charges for service. PG&E defends the cost increases as necessary to fund upgrades to its infrastructure and cover rising wholesale natural gas prices.

Since cheaper off-peak prices are incentives for people to use sun-sourced electricity, these strategies that reduce bills will also reduce harmful pollution.

PG&E and other utilities need to do better. If and when rates are changing, they must proactively engage and better serve customers with outreach and education about the changes. They should explain to customers how they might be affected, and how they can reduce their energy use by shifting consumption, practicing energy saving tips that can become positive habits, and exploring ways to invest in low-cost energy efficiency.  This is particularly important for the most vulnerable customers who are more likely to have inefficient appliances and housing without weatherization. Additionally, the utilities ought to help connect customers with clean energy innovators such as rooftop solar installers and demand response providers who can provide further solutions.

Abundance of renewables

Last month in a memorandum to its governing body, the California Independent System Operator (CAISO) – the organization responsible for controlling much of the state’s electric grid – announced plans to turn off 8,000 MW of solar generation capability routinely in the middle of the day. This wasted capacity could power all of the homes in PG&E’s service territory. (On average, 1 MW meets the demand of roughly 750 homes, so 8,000 MW could power 6,000,000 homes, or about 25 percent more than PG&E’s 4,400,000 residential customers.) This is inefficient and in the long term will hurt the economic viability of these resources.

How TOU can help

There is one solution that can help address both price shocks and energy waste: TOU pricing. California’s three major utilities, PG&E, San Diego Gas & Electric, and Southern California Edison, are currently working on plans to transition most residential customers to these rates in 2019. Included in these plans are year-long pilots that will start automatically switching some customers to TOU rates in March 2018.

With TOU rates, there are consistent and clear times of day in which it’s affordable to use energy, and times (including periods of high reliance on fossil fuels) in which it’s more expensive. The daily routine gives customers access to low-priced electricity every day and thus more control over energy bills. In this way, TOU helps us wrap our heads around new ways of thinking about electricity, which leads to new and better choices on how to use it wisely.

By shifting energy use to times when the sun is shining or the wind is blowing, we can utilize more of our existing means of renewable electricity. What’s more, by 2025 our electric system could save up to $700 million per year in doing so. In 2016, that amounts to about $70 in savings for the average California electricity customer each year.

Positioning for Success

This solution will only work if customers are aware and educated about rate changes and given easy ways to make TOU rates work best with their electricity needs. Through utility research, we already know some customers may find it more difficult to adjust to these rates than others, and that additional bill pain may be felt during summer months when air conditioning demand is most intense. Utilities know now who these customers are likely to be, and can go much further in introducing them to cost-effective solutions. Let’s continue to maximize our renewable resources and provide all Californians with ways to enjoy affordable, clean electricity.

By Tim O'Connor

Last week the California Air Resources Board unanimously voted to finalize new regulations to reduce oil and gas methane emissions. This is the first major environmental regulation that has been issued since the new Administration took office, and sends a clear message that states aren’t going to take the new administrations attacks on the environment lying down.

Every signal from the Trump Administration – from pledging to kill the Clean Power Plan, to the recent executive orders that order EPA to begin reversing important climate protections, to the massive proposed budget cuts to the Environmental Protection Agency– indicate that the United States government is keen to undo some of the fundamental environmental protections that are critical to our health and prosperity. And yet, through these signals, California is moving forward with sensible policies that will hold oil and gas companies accountable for their operations, and their pollution.

Unsurprisingly, many see California as an outlier state, and passing the strongest oil and gas regulations in the county to require companies to regularly inspect equipment for gas leaks will undoubtedly feed that narrative.  However, just as they would if passed in other jurisdictions, the state’s efforts to prevent leaks help stop companies from needlessly wasting our energy resources – currently California operators report wasting $50 million of gas every year through their leaky operations.

California is the third-largest producer of oil in the country – meaning its actions are much more than symbolic.  As such, policy makers in oil and gas producing states across the country should take a hard look at the economic and environmental benefits of the state’s newest protections as proof that better environmental outcomes can go hand-in-hand with responsible energy development and economic prosperity. In short, unlike what the Trump Administration would have Americans believe, we don’t have to choose between a healthy economy and a healthy environment, we can and should have both.

In fact the evidence shows that California isn’t an outlier on this issue: several other states have begun to make this point. For example, CARB’s rules come on the heels of similar actions undertaken by a mix of red and blue energy producing states. Colorado, Ohio and Wyoming each have policies that require oil and gas companies to use affordable methods to reduce emissions. Pennsylvania, the nation’s second-largest gas producer, is pursuing similar policies as well.

It’s easy to understand why states are pursuing emission reductions, and why our nation’s elected officials in Congress should resist efforts to backslide on its policies. Cutting oil and gas emissions is one of the most-cost effective ways to, protect air quality, tackle climate change and reduce energy waste. And it can be done by implementing home-grown solutions that are already being deployed right now – solutions that also result in new business opportunities.

California’s ability to double down on climate pollution without sparking economic chaos should send a message that smart environmental protections are what Americans deserve and our economy can easily accommodate.  The Administration can push back, but other policy makers – both in congress and in other states – can and should march forward. The climate data says it needs to be done, the economics show it works out, and the people across the land support and need it.

 

By Diane Regas

Barely a month after his inauguration, President Trump is proceeding with plans to dismantle protections under the Clean Air Act and Clean Water Act.  The targets include limiting pollution into streams and wetlands that flow into drinking water for a hundred million Americans, automobile fuel economy standards that cut tailpipe pollution, and performance standards under the Clean Power Plan that would boost renewable power and fight climate change.  Trump and his EPA Administrator, Scott Pruitt, have drawn up reckless plans to slash EPA’s budget—greeted with derision even by some Republicans in Congress.  With the tragic story of Flint still fresh in people’s minds, the President is betraying the demands of his own supporters — fully 64% of Trump voters want to maintain or increase spending on environmental protection.

These actions are a tragic wrong turn for the country — and not just because they threaten to roll back decades of progress on air and water pollution, and the recent steps forward on climate change.

What I especially worry about are the lost opportunities for economic growth, new jobs, and the competitiveness of American companies — at a time when China and others are stepping up.

I think we can all agree that America is great in part because of our huge capacity for innovation — from Henry Ford to Elon Musk. But sadly, the new administration fails to understand that affirmative government policy has a crucial role to play in keeping the engine of innovation healthy and humming. In fact, during my decades of working under six different EPA administrators, almost all of them Republicans, I’ve seen first-hand the ability of smart regulations to unleash the enormous power of American ingenuity and entrepreneurship.

Keeping America Great: Smart Rules Can Help The Economy And Nature Prosper
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Smart rules — focused on results, not process — stimulate new ideas, create new markets and jobs, and raise living standards for all Americans. The limits imposed on pollution spewing from auto exhaust pipes not only cleaned the air and improved health, for example, they also spurred new technologies that increase fuel efficiency. As a result, Americans save money every time they pull up to the gas pump (though these benefits are threatened by the plans to roll back fuel economy standards). Similarly, protecting the ozone layer drove the development of new refrigerants, bringing higher profits for the innovative companies that paved the way to the new products.

But don’t take my word for it.

Clean states

"I refused to gamble on the energy diversity options." — Illinois Gov. Bruce Rauner

Listen instead to Bruce Rauner, the Republican governor of Illinois. Rauner recently signed a bipartisan bill that requires utilities in the state to generate 25% of their electricity from clean renewable sources like wind and solar by 2025 and to significantly boost the efficiency of energy use in homes and businesses. The mandates are good for the planet, of course, because they will cut the state’s emissions of climate change-causing greenhouse gases even more than would be required under Obama’s Clean Power Plan. And far from killing the economy, they will entice more than $10 billion in new investment dollars into the state and save people money on their electric bills. “I refused to gamble on thousands of good-paying jobs, and I refused to gamble on the energy diversity options for the people of Illinois,” Rauner told the Chicago Sun-Times. “That’s why I fought to make this bill happen.”

Clean grid

These regulations are stimulating the economy by creating high-paying jobs in construction and in manufacturing.

Or consider a seemingly arcane change in rules by the Federal Energy Regulatory Commission (FERC) about how transmission grid operators are paid to manage power fluctuations on the grid. The rule change has already spurred competition and made it cheaper (and more effective) to rely on batteries instead of ramping up gas generators — and helped fuel a whole new business in large-scale battery storage. Now, that industry is being truly kick-started by regulatory mandates, first in California, then in Oregon and Massachusetts, requiring that hundreds of megawatts of storage be added to the grid. This support in the early phase will help make battery storage competitive everywhere. These regulations are crucial weapons in the fight against climate change. But just as important, they are stimulating the economy by creating high-paying jobs in construction and in manufacturing facilities like Tesla’s battery gigafactory. As California Governor Jerry Brown says: “Regulation inspires innovation.”

Clean cars

I’ve been fortunate to personally benefit from such innovations. Pacific Gas and Electric is paying me to use my electric car as flexible power storage on their grid. PG&E and BMW have teamed up in a pilot project to test how to use plugged-in electric vehicles to meet short spikes in the supply of clean power. The utility saves money on power plants, can build-in more renewables, and will pay owners like me up to $900 over the two-year program. I’m also thrilled by the many advantages of the car itself: peppy acceleration, whisper-quiet operation, and low maintenance costs.

Clean tech

Breathtaking innovation in sensors, artificial intelligence, and advanced materials can thrive because the US creates the right environment. But an ideologically blinded attack on all government funding and regulation will create uncertainty and smother innovation that we desperately need. More than ever, we urgently need to protect the environment and slow climate change with smart investments and standards that also increase prosperity for all Americans. “The key is designing policies that point the way forward while creating a wide playing field for innovators to develop the best solutions,” says Anthony (Tony) F. Earley, Jr., Executive Chair of the Board of PG&E Corporation.

Global momentum

China is creating the world’s largest carbon emissions trading system.

Other countries understand this urgency. China is creating the world’s largest carbon emissions trading system, harnessing the power of the free market to fuel innovation and find the cheapest and best approaches to cutting carbon pollution.  In a powerful symbolic move, China just announced a competition to develop key market infrastructure — on the Friday before the National People’s Congress.

Countries like Germany, Denmark, the Netherlands, and Norway are already far ahead of us in shares of renewable power or electric cars and are reaping the resulting economic benefits from their homegrown innovations and world-leading companies. Eliminating the rules that have been successful in stimulating clean energy advances here in America will only put us further behind.

With the right smart regulations and policies, we can protect our cherished clean air and clean water and stabilize the climate. And at the same time, we will also keep America great.

This article originally appeared on Forbes.

Photo source: Grid Alternatives

By Larissa Koehler

If music has taught us nothing else, it is that more is better. Three Dog Night taught us that “one is the loneliest number,” the Beatles taught us that we need help from our friends to get by, and Rob Base and DJ E-Z Rock reminded us that “it takes two to make a thing go right.”

Those lyrics apply just as easily to our electric grid. That’s because on the grid, it is best to have a bigger, varied group of resources.

Through the Integrated Resource Plan proceeding, the California Public Utilities Commission is requiring California’s big three utilities – Pacific Gas & Electric, Southern California Edison, and San Diego Gas & Electric – to create energy portfolios that are balanced, cost-effective, and position the utilities to meet state climate and energy targets. This was codified in SB 350 (De León), which required the Commission and utilities to develop these integrated resource plans (IRPs). Accordingly, the Commission has set forth the following specifications:

• By 2030, meet the greenhouse gas reduction targets set forth in SB 32 (Pavley) – a 40 percent reduction relative to 1990.
• Enable an energy portfolio of 50 percent renewable energy.
• Maintain reliability, strengthen diversity and resilience, and prevent severe bill impacts. In practice, this means the plans must continue to ensure utilities provide enough power at all times to serve their customers while making clean resources – including energy storage and tools like demand response – more of a focus in their energy portfolios. These changes should be cost-effective for customers.
• Prioritize reduction of harmful air pollution and greenhouse gas emissions in disadvantaged communities.
• Widely electrify transportation.

In short, IRPs are required to show a lot of ambition, and their efficacy – or lack thereof – can have a tremendous impact on whether or not California successfully meets its ambitious climate and clean energy goals.

Bigger, Varied Resource Portfolios to Clean up California’s Grid
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How can California’s utility plans succeed?

Given all these utility plans are set to accomplish, it’s important to get them right. Here are some ideas for how to make them as successful as possible:

• Consider revision of the utility business model: As expressed in the Integrated Distributed Energy Resource (IDER) proceeding, the current planning process is an opportunity for the Commission to re-evaluate (and re-envision) the utility business model. Currently, shareholders make profits based on their investment in infrastructure – this de-incentivizes investment in distributed resources (like home solar and demand response), because they require less utility infrastructure than their “poles and wires” brethren. Encouraging utilities to invest in distributed energy resources will take more than the pilot established by the IDER proceeding. Getting utilities to invest in clean energy will require a “fees for services” or performance-based ratemaking model. In a fees-for-services model, the utility would be eligible for a share of profits when connecting customers to third-party distributed energy resource providers. Under a performance-based ratemaking model, the utility would be able to collect profits by reaching of a set of pre-determined metrics.

The procurement process can level the playing field for flexible, clean energy resources.

• Coordinate with other relevant proceedings: The IRP process will be more successful if it draws on learnings from other key proceedings. Acknowledging and integrating important findings from, for example utility electric car pilots, the utility storage mandate, and the IDER proceeding, will only serve to strengthen the final version of the IRPs. Additionally, the IRP proceeding will now include a significant portion of PG&E’s plan to replace Diablo Canyon ─ California’s last nuclear power plant which the utility is proposing to retire and replace with clean energy solutions. This will make it vital for the IRPs to consider the needs that arise from the plant’s closure and how to ensure the power that replaces it is clean and low-cost.
• Focus on disadvantaged communities: Low-income communities are disproportionately burdened by harmful pollution, so utility analyses must correctly pinpoint the areas in their service territories that are most in need of clean energy solutions and then prioritize serving those communities. From there, they can figure out how to cost-effectively deploy clean, distributed resources in those locations.
• Transition away from natural gas reliance: The procurement process can level the playing field for flexible, clean energy resources. This can, in turn, incentivize utilities to move away from using natural gas resources for the traditional, yet increasingly outdated, role they play in our energy system (one of balancing out intermittent resources and meeting high demand). The IRPs should encourage resource mixes capable of cutting harmful carbon pollution while maintaining reliability. This impacts whether and how utilities balance variable electric generating units (i.e. solar panels and wind turbines) with existing and new fast-response gas units.

With these elements, utility IRPs have the potential to create a clean, affordable energy system ─ one that leverages the collective strength of a broad range of clean energy resources from rooftop solar panels to home batteries. With all these tools working together, we can ensure a reliable California grid.

By Simi George

A new study, jointly conducted by the California Independent System Operator (CAISO) – the entity responsible for overseeing much of California’s electric grid – First Solar, and the National Renewable Energy Laboratory (NREL), demonstrates the untapped potential of utility-scale solar. The study shows that utility-scale solar can provide key services needed to ensure electric grid stability and reliability – better known as ancillary services – at levels comparable to conventional, fossil fuel driven resources.

California needs to reduce reliance on natural gas for ancillary services

In CAISO’s market, ancillary services are overwhelmingly provided by natural gas-fired resources, and their share of the pie has been increasing in recent years.

This growing reliance on natural gas for ancillary services merits attention for many reasons.  

• The repercussions of the Aliso Canyon disaster underscore the need to mitigate the risk of overreliance on any one resource for electric reliability needs.

• There are significant environmental benefits to greater participation of clean energy resources in the provision of ancillary services. This is particularly relevant to California, given its ambitious greenhouse gas reduction goals.

• Increased participation by clean energy resources in ancillary service markets can increase supply of these services, benefit end users via reduced production costs, and provide additional revenue streams to these resources. Allowing all resources capable of providing ancillary services to compete on an equal footing with conventional resources is a pre-requisite for a competitive market.

As renewables penetration increases, so will the need for ancillary services

The findings of the new CAISO- First Solar-NREL study have significant implications for the integration of all renewables (not just solar) on California’s grid. California’s renewable portfolio standard mandates that at least 50% of electric generation be driven by renewables by 2030. Given their inherent variability, as more renewables come online, grid operators will need additional ancillary services to ensure grid stability.

In particular, we are likely to see steep increases in ramping needs in the afternoon and evening hours, driven by mid-day solar generation. Solar generation in the middle of the day leads to a drop in net electricity demand, followed by a sharp increase in the afternoon/evening, as people come home from work and school, switch on their lights and appliances, and solar generation falls with the setting sun. This is reflected in the “duck curve” (see figure below) which underscores the need for flexible resources, that are capable of quickly responding to sudden fluctuations in renewable output.

Net Load on CAISO System (projected through 2020). Source: CAISO, “What the duck curve tells us about managing a green grid”, 2016

CAISO has an ancillary services scarcity pricing mechanism that is triggered when it is unable to procure the targeted quantity of one or more ancillary services. In 2015, CAISO experienced its first ancillary service scarcity event, signaling a mismatch between the demand and supply of ancillary services.

Next steps

To follow up on the study, CAISO plans to identify barriers to the provision of grid services by renewables and explore incentives to harness this potential. This is a welcome next step. Because of the unique characteristics of clean energy resources, there are challenges to their participation in ancillary services markets. What’s more, these markets were not designed keeping renewable resources in mind.

Studies such as the CAISO-NREL-First Solar joint study demonstrate that renewables can provide essential grid reliability services needed to support the transition to a cleaner grid. Now, the challenge is to develop the market design features that will allow California to harness these capabilities.

Image source: Ken Kistler

By Irene Burga

This week, California’s Air Resource Board (ARB) released a strong and likely final draft of new regulations that will reduce methane pollution from new and existing oil and gas facilities across California.

Methane essentially is natural gas — wasting it is tantamount to wasting an energy resource. California producers report losing about 75,000 metric tons of methane every year, while nationally companies on publicly owned lands reportedly waste more than $1 million worth of natural gas every day. Alongside methane, oil and gas facilities also emit a list of toxic pollution like hydrogen sulfide, toluene, xylene, and benzene, all of which can be harmful to public health.

The new California rules mirror successful efforts in Colorado and Wyoming, where regulators understand that reducing methane emissions prevents resource waste, improves economic outcomes and reduces air pollution. Similarly, last year the Environmental Protection Agency (EPA) issued federal standards for new oil and gas facilities based on those state policies, and the Bureau of Land Management (BLM) wrote a similar policy for oil and gas companies operating on federal or tribal lands.

But now those federal rules are in the crosshairs. The House of Representatives will vote this week on a bill to roll back the BLM standards, which are designed to reduce an estimated $330 million worth of natural gas that is wasted on public lands each year through leaks, intentional venting, and flaring. A similar attempt on the EPA rules is expected.

The attack on federal standards makes state rules all the more critical to the safe oversight of oil and gas activity around the nation.

Take Action: Send a message to California and the nation that you support efforts to cut methane pollution.

National Rollbacks Undermine California’s Efforts to Protect Communities

While California is the nation’s third largest oil producer, it’s also a major energy consumer, importing more than half of the oil and 90% of the gas required to meet the state’s energy needs. Even though passing California’s rules will reduce regional pollution and prevent our resources from being wasted, federal back-peddling will mean the large volumes of oil and gas California imports will have a bigger environmental footprint, and this can have an adverse impact on some of our most vulnerable communities.

For example, recent reports find that the Latino communities that make up approximately 40% of California’s population are often more adversely impacted by the industry’s emissions, which can increase smog levels and thus increase the frequency and severity of respiratory diseases and asthma attacks.

Across the country nearly 1.8 million Latinos live within half a mile of an oil or gas facility, and higher poverty levels and relatively lower rates of health insurance mean the health threats from air pollution, translate into a bigger health burden on Latino communities.

National Standards Can Create a Safety Net for All Communities

California rules should provide a moment of relief and celebration for those concerned with improving air quality, and stopping the unnecessary waste of our energy. But the stakes could not be higher for the rest of our nation.

Across the U.S, the oil and gas industry emits more methane pollution than any other sector. If Congress succeeds with its rollback plans, states may be left with little option other than to regulate at their own behest, which could lead to disparities that don’t protect all Americans equally.

This is why institutions are mobilizing to educate Congressional leaders of the danger and shortsightedness of federal oil and gas rollbacks.  All communities deserve to be protected. By supporting CARB’s efforts, we can send a message to national leaders that communities here and across the country demand equal protections from this pollution.

Smart policies that reduce methane and other harmful oil and gas pollutants are exactly what California and the nation needs. Join EDF and thousands of others who are urging California and Congress to stand up for standards that ensure all American have access to a healthy economy and a healthy environment.

By Tim O'Connor

As he settles into his final two years as California’s longest-serving Governor, Jerry Brown has limited time to finalize his energy and climate policy legacy. Meanwhile, with a new crop of state legislators and two new appointees at the California Public Utilities Commission (CPUC), California has a fresh set of actors who will be actively questioning the way things are — and the way things should be.

While there are a lot of economic sectors that will be under the microscope for the next two years, for natural gas policy, these five key opportunities will likely have the most relevance.

1) Respond to the Aliso Canyon disaster with true reforms

As we’ve written previously, the disaster at Aliso Canyon revealed that the state is dangerously dependent on natural gas. We’ve also seen that gas and electric markets have been designed to stifle economic signals that would otherwise spur investment and development of alternatives to gas for meeting reliability needs. In fact, evidence suggests we are increasing our reliance on natural gas as a backstop, as the state increases its renewable energy output.

How the state responds to Aliso Canyon — whether true market reforms result, or whether the facility is bullet-proofed against future well failures and allowed to reopen without larger changes — will be a critical test for the state and the direction of natural gas policy. In 2017, the CPUC will have active proceedings on this issue – expect a wide variety of energy companies, from natural gas utilities to clean energy providers, to have a seat at the table.

2) Hold electric utilities accountable to procure alternatives to natural gas

As required by the landmark 2015 legislation SB 350 – a bill to move the state towards a 50% renewable portfolio standard –  the CPUC and regulated electric utilities must develop first-ever Integrated Resource Plans (IRPs) detailing how each utility will reliably meet customers’ needs while cutting carbon and growing clean energy.

This year, the CPUC will set the standards for how those IRP plans are to be written and the utilities will begin the task of planning their investment decisions and laying them out in their written plans. These plans, and the long-term investment trajectories laid out within them, will lay the foundation for the next decade of investments in clean energy and natural gas power plants.

Municipalities like San Diego and utilities like LADWP have begun to look at transitioning to a 100% renewable electric system, setting an ambitious high-water mark. Coupled with this, prominent lawmakers are also talking about whether California as a state can achieve a fully carbon-free energy system. However, no observer to the IRP process would expect any of the regulated utilities to come close to that. At the same time, it will be up to the CPUC to hold underperforming utilities accountable.

While gas and electric market reforms are a key part of the solution to bring more renewable energy sources into the mix, so too is ensuring that utilities plan and actually pursue investments in clean energy solutions. This is where the CPUC comes in. The agency, and its new commissioners must ensure the utility IRP’s are strong on clean energy tools like energy storage, demand response, and next generation renewableand don’t default — as they’ve done for years — to investments in large stationary natural gas power plants.

3) Tough standards to control methane leaks and enhance infrastructure integrity

In 2015, California started separate rulemakings at CARB and the CPUC to require reductions of methane pollution, the primary component of natural gas, from the state’s vast oil and gas infrastructure. In 2016, the state’s oil and gas agency (DOGGR) also started rulemakings to improve the integrity of oil and gas wells, thus preventing infrastructure failures that can result in water and air pollution.

These rules are scheduled for adoption in 2017 (CARB) and 2018 (CPUC and DOGGR) and will mandate that oil and gas producers, and natural gas utilities, do a better job finding and fixing leaks, while also implementing new standards to prevent leaks from occurring in the first place.

These updates are nothing if not sensible, but oil and gas producers and some natural gas utilities have already pushed back hard. Agency responses to sky-is-falling or misleading arguments will be key to protecting families and the environment going forward. The environmental and public health community, as well as the collection of businesses engaged in methane mitigation and well integrity, must make their voices heard so agencies hear the massive support for protective oil and gas regulations.

4) Get serious on agricultural and waste emissions

While oil and gas infrastructure represents the largest source of methane pollution in the United States, agricultural and waste sectors are also major sources. However, by capturing and using these emissions, they can also have an impact on decarbonizing the natural gas system, too.

As detailed in several analyses and a CARB-written Short Lived Climate Pollutant Plan (as required by a 2016 bill SB 1383), a massive investment of private and public capital is being planned for technology necessary to delivering clean biogas (also called renewable natural gas)  into the energy system.

Since California uses so much natural gas (for power generation, heating and cooling, transportation fuel, etc.) there won’t be enough biogas production to replace all, or even half of it. However, if done correctly, investments in biogas technology can reduce methane while also creating construction and operation jobs that are essential to revitalizing California’s economy – particularly in more rural, economically depressed regions.

How CARB gives guidance and directs investment into biogas facilities will be key to the state’s overall effort, but whatever happens, investments must be undertaken with close coordination between scientists, local communities and long-term infrastructure planners to prevent unwanted side effects.

5) Extend the state’s cap-and-trade program and Low Carbon Fuel Standard

California has been a leader in establishing long-term market signals for investment and innovation that have already yielded carbon reductions and diversification of our transportation fuel system. In addition, the California legislature and CARB have already begun the process of laying out the future of the state’s marquee cap-and-trade program, and discussions are under way about extending the Low Carbon Fuel Standard (LCFS).

Both programs establish a price on pollution, and both affect natural gas emissions. Cap-and-trade requires the surrender of emissions allowances for the combustion of natural gas in power plants, homes, businesses and vehicles; creating an incentive to use carbon free sources of energy to accomplish the same output. The LCFS, on the other hand, focuses on transportation sector emissions and requires the use of low carbon fuels across the state’s transportation system – creating incentives to switch away from gasoline and diesel toward fuels like natural gas and renewable natural gas.

By extending the state’s cap-and-trade program, California will ensure the climate pollution is not emitted without a price, creating lasting market signals to invest and deploy lower carbon resources across the energy system. Extending the LCFS will drive increasing investments in alternative fuel and vehicle technology capable of displacing gasoline and diesel fuels thereby cutting carbon from the most polluting sector of the California economy. Negotiations over both programs are expected in the state legislature this year and can have dramatic consequences for years to come.

While the landscape over the next two years will undoubtedly include several other initiatives that will affect the future of natural gas in California, these five are likely to have the largest impact. How the state moves forward on its commitment to protecting the environment by changing the status quo, will have profound impact on its ability to combat climate change and protect the public health.

By Jayant Kairam

The late California historian Kevin Starr once wrote, “California had long since become one of the prisms through which the American people, for better and for worse, could glimpse their future.” These words have never felt truer. Just ask Gov. Jerry Brown or the leaders of the state legislature, who are all issuing various calls to action to protect and further the state’s leading climate and energy policies.

California is the sixth largest economy in the world and the most populous state in the nation. What’s more, we’ve shown that strong climate and energy policy is possible while building a dynamic economy. We’ve proved that clean energy creates far more jobs than fossil fuels – nationwide, more than 400,000, compared with 50,000 coal mining jobs – while protecting the natural world for all people.

It’s no shock our leaders are fired up. There’s too much at stake. With our state’s diverse, booming yet  unequal economy, we are not unlike the rest of the nation. State-level leadership is more important than ever, and other states can and should learn from California to drive action across the U.S.

A case study in a clean energy economy

Business and economic growth relies, in part, on certainty and a long-term view. That’s why electric fleet-firm Proterra announced it would manufacture its buses just outside Los Angeles – it understands its market is on the West Coast. Proterra is only the most recent of a long list of firms that understand California’s environmental policies provide market opportunities.

Silicon Valley titans like Google, Apple, and Facebook are all are well on their way to meeting internal commitments to 100 percent renewable energy. And California was recently ranked among the top five states for corporations that seek to buy or build renewable energy generation – attracting job-creating enterprises.

Importantly, clean energy is sparking businesses of all sizes. A new report highlights how the state’s long-standing energy efficiency requirements have helped create 300,000 jobs in energy efficiency – most coming from small firms.

What to watch in California

These are just a few examples of how forward-thinking policy – including the state’s 2030 climate targets and 50 percent renewable portfolio standard – are shaping markets, creating jobs, and stimulating economic growth. Citizens are demanding strong policy as clean energy technologies from LEDs, to smart thermostats, to rooftop solar continue to fall in costs.

Thus, California leadership is looking ahead to the clean energy frontier while also defending what we have. The three themes that guide where we are heading broadly center around effectively integrating cost-effective renewables, capitalizing on the potential of distributed energy resources, and making sure those advancements are accessible to all Californians. As more states make clean energy growth critical to economic and social progress, including the success of wind power in Texas, the recent bipartisan legislative victory in Illinois, and New York’s overhaul of their energy sector, it’s apparent that progress is catching on.

Integrating renewables to shape a clean, reliable grid

Although California is not new to enacting policies aimed at integrating renewables onto the grid, it remains paramount. Recent analysis suggests we are two years ahead of schedule in terms of hitting energy-load predictions associated with the amount and speed of California’s solar growth, illustrated by the infamous . This is, no doubt, a good problem to have. However, the growth  and cost competitiveness of renewables are making ever more pressing the challenge of meeting steep afternoon ramps in energy demand – when Californians come home and switch on their lights and appliances.

We are two years ahead of schedule in terms of hitting energy-load predictions associated with the amount and speed of solar growth."

The state has worked to tackle renewables integration challenges from multiple fronts. Regulators passed rules to incentivize energy storage. Successful and smart design of time-of-use rates has the potential to shift energy load, and drive customers to consume electricity when it’s cheapest and cleanest. Additionally, the push to create a western-wide electric market is in large part due to the need to find new markets for California’s cheap, wasted solar, and to bring in cost-effective renewables from other western states when Californians need it most.

Moreover, a recent study by the California Independent System Operator (CAISO) showed that large-scale solar coupled with the right set of inverter technologies can transform renewables into grid resources that meet ramping and reliability needs. First and foremost, the key will be to extend our fantastic midday solar to serve energy demand throughout the day using clean energy strategies and incentives.

Optimizing distributed energy resources

California leads the nation in many indicators of distributed energy resources from the most advanced meters to solar installation. However, ensuring the positive impact of these clean resources reaches the grid is where the rubber hits the road. This will include mapping out and structuring markets so distributed energy resources, like  battery storage, can provide cost-effective power where it is most beneficial to help offset the need for future generation capacity.

Thankfully, bolstered by California’s leading clean tech industry, the state is already testing market reforms and demonstrations to prove the potential of these distributed resources. Here are a few examples:

• This past summer, the three major utilities in the state contracted 82 MW in demand response from the Demand Response Auction Mechanism, a cutting-edge market vehicle for residential demand response.
• Market reform is also happening through aggregation. The CAISO, which controls much of the state’s grid, received approval for a framework in which smaller distributed energy resources can meet reliability needs at the wholesale level when grouped together.
• The Department of Defense is funding the largest “vehicle-to-grid” demonstration project in the world at the Los Angeles Air Force Base to test the potential of two-way power sources like electric vehicle batteries.  The aim is to determine whether the Defense Department’s fleet of electric vehicles can reliably provide power back to CAISO during times of peak demand.

As we look to further capitalize on the flexibility and affordability of distributed energy resources in forums like the major utilities’ long-term procurement planning processes, it will be critical to continue to push the tools that do the following: use methods like aggregation, use resources like two-way power, take location into account, and rethink the utility business model.

Ensuring success reaches all communities

California, through the SB 350 Barriers Study, is also examining how clean energy can spur growth in low-income and disadvantaged communities across the state. This signals that the state realizes that in order to achieve our energy goals we need to ensure clean energy resources are accessible to all communities. Despite big economic gains, the state continues to grapple with near 20 percent poverty. In both urban and rural regions there are high percentages of renters and seniors, who may not have the financial capital or live in physical environments suitable for investing in clean energy. These barriers make solutions like rooftop solar, high efficiency appliances, and household storage just out of reach.

The state has shown a good track record of protecting burdened communities from further environmental harm and incentivizing job-creating clean energy. However, the robust, far-ranging set of recommendations in the Barriers Study provides a source of inspiration and acknowledgement that we need to do more.

Our state is a multi-faceted economy, built on a diversity of people, politics, and industries, and defined by wealth,  poverty, and millions of hardworking Americans –  just like the rest of the country. We invite states in regions from the Pacific Northwest to the Mississippi Delta to learn from California’s success, and the challenges.

By Tim O'Connor

After months of speculation, the California agency in charge of setting standards for oil and gas operations (“DOGGR”) this week announced a pair of meetings to take public comment on the reopening of the Aliso Canyon Natural Gas Storage Facility.

This development stems from legislation passed in 2016 (SB 380), and is expected to be among the final steps before Southern California Gas Corporation (SoCalGas) is allowed to restart limited use of the facility. So, while it’s critical for the state to get its decisions right for safety and near-term electric reliability related to Aliso, to fully comply with SB 380, the decisions being made also need to take into account the larger issues facing California today.

Don’t compromise on public health and safety

Multiple state policies – including SB 380, Governor Brown’s Aliso Canyon executive order, and upcoming DOGGR regulations — carry mandates to prevent gas storage facilities from posing a public danger and repeating the massive four-month health and safety crisis that occurred between late 2015 and early 2016.

In parallel with those efforts, throughout 2016 DOGGR carried out a lengthy process involving numerous state agencies, experts from the national labs and oil and gas industry, and public input to create a comprehensive well inspection and facility reopening protocol. This protocol  requires all 114 wells on the Aliso Canyon site to either be fully tested and/or retrofitted, or be taken out of operation (results of all tests are available on the DOGGR webpage).

DOGGR and the state’s Public Utilities Commission (CPUC) also ordered a full root cause analysis to be performed – something that commonly follows major accidents and releases. But now SoCalGas is petitioning DOGGR  to allow for reinjection into Aliso Canyon before this analysis is fully completed.

Since that root cause analysis may yield important information on what went wrong and what health and safety protections the field should be subjected to going forward, it would be prudent for any decision DOGGR makes allowing reinjection into the facility to act only on a temporary basis until both the final analysis and permanent gas storage safety regulations are complete.

Southern California must also focus on long-term energy reliability and climate goals

In addition to protecting public safety, SB 380 signaled a preference for “minimizing or eliminating use of” the facility so long as the region can maintain energy and electric reliability and affordability of energy service. Therefore, if DOGGR determines that Aliso Canyon should reopen because it does not pose a safety risk, it should therefore only do so on a limited basis because this decision involves much more than near-term safety.

There is no denying that Aliso Canyon highlighted California’s heavy reliance on natural gas for electric reliability, even if there is an active conversation on “how” reliant the region actually is on this particular facility. Case in point: Since the facility was taken offline, state agencies have developed two action plans to reduce the risk of energy outages, and SoCalGas issued an official advisory warning of potential energy shortages in December.

But even if the reliability plans have alleviated some of the short term risk associated with limited gas availability from Aliso, they don’t address the long-term needs of the region: changing the overall direction away from dependence of natural gas for reliability purposes, or meeting energy and environmental policy goals for integration of renewables while also reducing greenhouse gases.

One key example of the need to focus on climate and reliability goals in the context of Aliso Canyon is the most recent Integrated Resource Plan for Los Angeles Department of Water and Power (LADWP). While the utility is currently on the path to achieve 50% renewable energy by 2030, it also forecasts a 30-40% jump in natural gas use for power generation in 2025. As stated by LADWP, this jump in gas use is due to the need to build and operate new natural gas power plants (as old ones are taken offline) to balance the increasing volumes of renewable energy on the system.

LADWP Integrated Resource Plan Natural Gas Use Projections based on different renewable penetration %

What the gas demand forecast in LADWP exemplifies is that under the current system, natural gas power plants will be needed as utilities pursue higher renewable energy targets. This is because gas and electric markets have been designed to prevent economic signals which incent the widespread investment and development of alternatives to gas for meeting reliability needs. This doesn’t mean the region should just maintain facilities like Aliso, but rather needs to shift towards a system with more diverse energy sources and fair market opportunities for cost-effective clean resources. (Notably, with the passage of a new resolution in Los Angeles to study a pathway towards 100% renewable energy and away from gas dependence, the city seems to understand the task before it.) After all, since combustion of natural gas releases greenhouse gases, this projected jump in gas use undermines the progress of the utility, which has cut overall greenhouse gas emissions by 23% since 1990.

Heavy Reliance on Natural Gas is a Statewide Issue Too

What LADWP’s gas forecast demonstrates is that bulletproofing Aliso Canyon from future well failures won’t remedy the fundamental problem of heavy reliance on natural gas for balancing the electric system. However, looking at the Aliso Canyon situation in the larger context, it’s easy to see this isn’t just a Southern California problem.

A piece of evidence that highlights the state’s heavy reliance on natural gas for balancing the electric system can be seen deeply embedded on page 145 of a report issued by California’s grid operator (CAISO) in 2015. On it, CAISO shows that nearly 98% of the energy availability from sources sitting in non-spinning stand-by mode in 2015 (power generators that sit in the off position but which are able to be turned on quickly) were natural gas power plants – with negligible contributions from alternatives.

What the CAISO graph shows is that natural gas is a key part of managing the current power system in California, and will continue to be so as the state ramps up renewable energy generation in the years to come.

Post Aliso Canyon: the CPUC, CAISO and other state agencies have launched new efforts to study  natural gas storage. They have also started  to study and create new market opportunities for alternatives to gas, and have started evaluating  how the energy system reliability value that gas provides can be met with alternatives. However, with over a year since the state’s largest gas leak shed light on a much larger problem, a lot of open questions remain unanswered. An important solution to this will be the conclusion of ongoing and new public rulemaking proceedings at the CPUC – however EDF will write about that topic in the future.

What’s next?

In complying with SB 380, DOGGR, the CPUC and the state must recognize that even if the Aliso Canyon facility has satisfied initial inspection requirements, the disaster set in motion numerous actions that evaluate the use of natural gas storage in California and the needed integration of other resources. As a result, to comply with the preference for minimizing or eliminating use of Aliso Canyon going forward, any decision to reopen the facility should only be temporary and California must work diligently to alleviate the state’s heavy reliance on natural gas. See EDF’s letter to DOGGR and the CPUC on this topic.

By Jamie Fine

California’s three major utilities – Pacific Gas & Electric (PG&E), Southern California Edison (SCE), and San Diego Gas & Electric (SDG&E) – have proposed plans to move Californians to electricity prices that vary with the time of day. Time-of-use pricing, or TOU, is critical to aligning our energy use with times when clean, cheap electricity powered by sunshine and wind is already available. TOU works because electricity is cheap when it can be powered by renewable resources and more expensive during times of peak (high) energy demand. As with any shopping, knowing prices empowers people to choose wisely to save money.

New research from Lawrence Berkeley National Lab estimates TOU rates could collectively save customers up to $700 million annually by 2025 by getting the most out of our solar and wind resources. They find that absent TOU rates, we will waste up to 12 percent of existing renewable generation capacity, and solutions like TOU can reduce this waste by six-fold. We at Environmental Defense Fund (EDF) estimate that if this clean electricity were instead provided by natural gas power plants, it would generate 8 million additional tons of greenhouse gas pollution each year. Burning gas when we could instead rely on clean energy would dramatically impede the 11 million tons per year of greenhouse gases we need to eliminate from our economy to reach California’s 2050 environmental goals.

Testing TOU

The three big utilities are half-way through “opt-in” pilot programs that test these new rates. They’ve just submitted plans to the California Public Utilities Commission to test automatically switching some people to TOU in 2018, leading up to a complete roll out in 2019. TOU rates will work for most customers right away, reducing their bills and providing new opportunities to save money. Further, people can always opt out of the program. 

However, the utility plans present an unnecessarily high risk of raising people’s bills during summer months, the reasons for which are explained below. To address this, the utilities will provide bill protection to everyone during their first year on TOU pricing ‒ guaranteeing no one will spend more than they would have if they had stayed on their old rate. Nevertheless, the plans must be designed to give customers actionable ways – not just measurements and band-aides – to manage potentially high summertime bills that could result if people don’t know how to switch the times they use electricity.

Like Clockwork: California Utilities Should Embrace Clean Energy Solutions when Testing Time-of-Use…
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EDF is pushing the utilities to prevent these problems by testing clean energy tools, like demand response and storage, along with customer education that can ensure comfort and affordability. The good news is that LNBL’s research and other studies indicate by moving California to time-based electricity rates we’ll reap significant economic and environmental rewards.

Ensuring a smooth transition to TOU rates

Looking closely at PG&E’s plan, we see that most people in hotter areas of the state would see their bills rise by at least $10 per month in summer months if they aren’t able to shift or reduce their energy use. Proven steps, like replacing old light bulbs with LEDs or cutting “energy vampires” (devices that pull electricity even when not in use or turned off), will save people money around the clock. Slight changes to use electricity when it’s cheapest, like precooling during sunny afternoons and running the dishwasher at off-peak times, will also help keep bills low.

While cautionary, this information also suggests there’s an opportunity to lower bills for everybody. PG&E’s analysis shows most people won’t see a big change in their annual electricity costs: 59 percent of low-income households which currently receive bill discounts will see reduced yearly electricity costs and 40 percent will see increases of less than $5 per month. For people who pay non-discounted rates, the numbers are similar: 69 percent will have annual bills that increase by less than $5 per month, with 31 percent expected to see bill decreases.

So how does this all work? First, it’s important to recognize that the utilities won’t be making any extra profits from TOU rates. Second, as TOU rates encourage strategies to line up our energy demand with cheap, clean solar and wind, we can rely on these assets more. This lowers the overall costs of providing reliable electricity relative to the current system, bringing down costs over the long-term for everybody. Third, TOU rates are part of a strategy to avoid the significant long-term costs of degrading our environment with harmful pollution from fossil fuels. And fourth, these rates will open new opportunities for market innovations that give Californians more control over their energy use. Utility estimates of bill impacts don’t include these benefits, but they should.

Helping TOU work for everyone

It’s critical that utilities test and implement strategies to help customers at risk of higher bills take advantage of new ways to manage their energy use. Put simply, the pilots should first test how to help people align their energy demand with times when solar power is abundant. They should then explore how to help all customers take advantage of clean energy solutions and become more flexible in their energy use. To further ensure TOU rates work for everyone, utilities and the California commission should do the following:

• Use data to identify people and places that need additional help. Utilities should find the Californians facing the largest potential adverse impacts when switched to TOU rates, such as those most dependent on air conditioning. They should also consider people who have old appliances, or live in older, less-efficient buildings, for example. SDG&E is proposing to do this in their plan with a robust customer segmentation strategy.
• Help customers find vendors for clean energy solutions. PG&E could offer TOU customers a link to their existing, very helpful website that makes it easy to share energy-use information with companies like rooftop solar installers and demand response providers.

Utilities have these types of solutions on their radars. PG&E’s Director of Regulatory Relations, Sidney Dietz, said in a recent meeting with Commission staff, “Customers should be given a price signal that supports newer technologies like storage.” However, utilities are not acting on these words in the regulatory proceedings where it could make a real difference.

TOU pricing, if implemented with the right set of supports, has enormous potential to help us get the most out of our renewables, with the least cost, while offering Californians a way to save money. Our utilities should be taking the necessary steps to ensure TOU works for all.

By EDF Blogs

By Jon Goldstein and Peter Zalzal

The legal fight to defend the Bureau of Land Management’s (BLM) recent efforts to prevent oil and gas companies from wasting methane on public and tribal owned land continued yesterday.

EDF and a coalition of local, regional, tribal and national allies filed a brief opposing efforts by industry organizations and a handful states to block BLM’s protections before they even come into effect. 

The states of New Mexico and California also sought to participate in the legal challenges, likewise stepping up to defend BLM’s common sense standards. Notably, New Mexico is the largest producer of oil from public lands in the U.S. and the second largest producer of natural gas.

In seeking to stay BLM’s protections, the industry associations have claimed the standards have no benefits – so blocking them won’t have any impacts on the communities they are designed to protect.

But BLM’s oil and gas waste standards are about ensuring that operators use common sense technologies to capture natural gas that would otherwise be wasted. That preserves a valuable natural resource and cleans up the air, all while putting additional royalty payments in the pockets of Western communities that can be used to fund schools, roads and important infrastructure.

For example, a recent analysis found that in 2013, oil and gas companies operating on public and tribal lands wasted more than $330 million worth of gas – more than $100 million of that from New Mexico alone. This translates to lost royalty revenues for local communities. One report estimates that without action to reduce this waste, taxpayers could lose out on more than $800 million in royalties over the next decade.

The challengers’ legal claims stand in stark contrast to the facts on the ground. Evidence of the broad-based benefits of BLM’s Waste Prevention Rule was readily apparent in yesterday’s court filings supporting the protections..  Current and former state and county officials and everyday Westerners alike let their voices be heard about the importance of common sense measures to preserve public resources and protect the environment.

For example, in their filing seeking to participate in the case, the states of New Mexico and California emphasized:

“Implementation of the Rule will benefit the States of California and New Mexico by generating more annual royalty revenue . . . . In addition, the Rule will benefit the health of the states’ citizens who are exposed to harmful air contaminants leaked, vented and flared from federally-managed oil and gas operations . . . . The People of California and New Mexico have a strong interest in preventing the waste of public resources, as well as in reducing the emission of harmful air pollutants that threaten the health of the states’ citizens, the integrity of their infrastructure, protection of their unique environments and ecosystems, and the continued viability of their economies.” ( Filing, pages 2 and 3)

And in their filing opposing the preliminary injunction, these states claimed:

“Because the Rule is likely to result in the stronger protection of federal lands and greater prevention of the waste of natural resources, which belong to the People, the public interest weighs strongly in favor of denying the injunction.” (Filing, page 16)

The benefits that New Mexico and California identified are broadly shared and were likewise reflected in declarations submitted by county officials and former state officials in support of the standards.

Current La Plata County Colorado Commissioner Gwen Lachelt identified both the problem of resource waste on public lands and the benefits for Western counties like hers in addressing it:

“The San Juan Basin, in which La Plata County is situated, has one of the highest rates of wasted gas and methane loss in the country, accounting for nearly 17% of U.S. methane losses.

“In addition to wasted methane, oil and gas sites in La Plata County and the San Juan Basin release dangerous pollutants such as benzene and ozone-forming pollutants that can lead to asthma attacks and worsen emphysema . . . . This air pollution continues to be a regional public health hazard, and has contributed to La Plata County receiving a low grade for poor ozone air quality from the American Lung Association…

“The Rule will benefit La Plata County by providing additional royalties that we can use to fund key County priorities—including infrastructure, roads, and education—while also helping to clean up the air in the San Juan Basin, which will have health benefits for our citizens.” (Filing, page 4 and 5)

Lachelt points out that unlike other leading oil and gas states like Colorado, New Mexico has no policies to reduce methane waste and other pollution from oil and gas wells, and that BLM’s efforts will help to provide uniformity across state lines.

Sandra Ely, a former Chief of the New Mexico Environment Department’s Air Quality Bureau likewise submitted a declaration describing the importance and benefits of the BLM standards. She particularly focused on the long-standing problem of resource loss in the San Juan Basin. The region made headlines in recent years when NASA scientists discovered a 200-square-mile methane cloud over the region – the largest methane cloud uncovered in the U.S. Subsequent studies determined that oil and gas emissions were the main contributor to the methane “hot spot.”

“I am aware of a recent study, focused on the San Juan Basin, which suggested that BLM’s proposed leak detection and repair requirements alone would result in anywhere from $1–$6 million dollars of additional revenue for New Mexico… Absent the Waste Prevention Rule, I am concerned that resource loss and poor air quality associated with oil and gas development will continue unabated in New Mexico” (Sandra Ely, Filing, page 7)

Western leaders have been vocal in their support for BLM’s sensible standards that take an important energy resource out of the air and deliver it responsibly to the American public. At public hearings that the BLM held across the west these rules were supported by more than 3 to 1 margins. More than 80 local officials across the West, including county commissions in La Plata, Park and San Miguel counties in Colorado and Bernalillo, Rio Arriba and San Miguel counties and the Santa Fe city council in New Mexico, all support the protections. And these rules enjoy broad bipartisan public support as well (more than 80 percent of Westerners in a recent poll).

Given this cross-cutting support and yesterday’s forceful legal filings, it’s no wonder that industry challengers in this case don’t even want the judge to hear the views of New Mexicans and Californians. Yesterday, they indicated that they would oppose these states’ efforts to protect the interests of their citizens by participating in the case. While this reflexive obstructionism isn’t surprising—industry petitioners filed their legal challenges within 40 minutes of the rule being finalized and tried to block the standards’ effectiveness shortly thereafter—it certainly reveals their very one-sided view of what is in the public’s interest.

The Wyoming Court is scheduled to hear oral argument in this case on January 6. We look forward to continuing to defend these standards that will clean the air and prevent waste.

By Lenae Shirley

New installed renewable energy capacity surpassed coal for the first time last year, the International Energy Agency reported recently.

It means that we added more wind and solar to our global energy system than oil, gas, coal or nuclear power combined – a trend that is expected to continue over the next five years.

But to truly transition to a global clean energy economy, we must accelerate this growth rate and modernize our electricity grid to maximize the potential of these new renewables. That way we can use as much clean energy as possible on any given day.

Many of these optimizing solutions already exist today.

They include technology such as powerful batteries that can store energy when renewables don’t produce electricity, for example, when the sun is shaded by a cloud.

There are also energy management tools such as demand response that pay customers for saving energy at critical times when the grid needs it. And innovative electricity pricing programs that encourage customers to shift some of their power use to times of day when clean energy sources are plentiful and electricity is cheaper.

All can, with the help of good policy, make the most of variable energy sources – as would a modernized and more dynamic electric grid.

A flexible energy system paves the way

Between now and the end of  2021, the United States will add around 100 gigawatts of new renewables, the equivalent of about 80 coal plants, the IEA reported. To integrate and value all this new, clean energy we need a smart and forward-looking grid strategy.

Because our energy system was initially designed for large, centralized power plants running mainly on fossil fuels, it depends on a steady supply of power and a network of transmission lines to deliver it to peoples’ homes and businesses.

As we expand smart grid solutions that empower businesses and households to make and move their own energy – for example, by selling solar power back to the grid – we begin to build a more flexible energy system that can accommodate intermittent sources of electricity and increased elasticity in demand. It also helps people reduce their power consumption and energy bills when they see that the cost of electricity fluctuates at different times.

A smart grid can detect when one house can’t use all the rooftop solar energy it produces and shift that electricity to the family next door that is charging an electric vehicle or running an air conditioning unit. It avoids using costly transmission systems to move power where it’s needed, reduces emissions and creates space for new and cleaner energy sources to move in.

A larger grid makes renewables go farther

But we must also expand the grid to allow for an influx of new renewable generation, or we may risk wasting even more precious resources.

If California’s electric grid were connected to neighboring states, for example, the state could export its excess renewable energy when the sun is shining there, and buy wind from Wyoming when it isn’t. This, again, would make wind and solar go farther.

The surge in renewable investments can change the equation – but it’s up to us to break down barriers and pave the way.

The rapid deployment of renewable energy technology worldwide is putting in place critical infrastructure and volume needed for a shift away from polluting fossil fuels.

But this growth needs to continue and accelerate. Renewable energy has a lot of catching up to do with coal and natural gas, which are enjoying a decades-long head start on infrastructure and investment.

Even though U.S. investment in clean energy soared from an impressive $10 billion to $56 billion between 2004 and 2015, renewables still represent a tiny fraction of the power produced by the American electricity sector. Nationwide, wind accounts for less than 5 percent and solar for less than 1 percent.

The surge in renewable investments can change the equation – but it’s up to us to break down barriers and pave the way for the clean energy economy. We have the solutions and know what to do.

This post originally appeared on our EDF Voices blog.

Photo source: CPS Energy

By Jayant Kairam

Just over a year ago, California’s SB 350 became law and was rightly celebrated for its boldness and impact, increasing the state’s renewable energy mix to 50 percent and doubling energy efficiency buildings. Today, a less heralded provision of SB 350 – charging the California Energy Commission with studying barriers to clean energy – pushes us toward exceeding our renewables and efficiency aspirations. Moreover, it recognizes that in order for the state to realize its climate and energy future, planning must include and reflect the needs of all Californians.

Through the SB 350 Barriers Study, the commission has engaged consumers, businesses, local leaders, environmental groups, and others to identify strategies that can unlock clean energy investments and spur growth in low-income and disadvantaged communities across the state.

The final version of the study and recommendations are scheduled for release later this month, just in time for lawmakers to noodle on the robust and far-ranging ideas before the 2017 legislative session. In addition, the commission – in conjunction with the California Air Resources Board – will issue a companion report about barriers to clean transportation. The study and its companion report are the kinds of tools that are critical for California to reach its clean energy goals.

Reaching California’s Clean Energy Goals Requires Inclusive Solutions
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Californians need clean energy benefits

Despite having the world’s sixth largest economy California struggles with poverty. Almost 17 percent of the population falls under the federal poverty line, which is accentuated by the state’s diverse geography. In cities like Fresno and throughout much of the Central Valley, poverty rates over 20 percent are compounded by some of the worst pollution burdens in the country.

With household costs rising for all Californians, the benefits of scalable and efficient interventions to keep energy bills manageable are critical.

A recent report by American Council for Energy Efficiency found low-income households in California spend more of their paycheck on energy than their middle and high income neighbors, ranging between 62 and 65 percent more in major cities like Los Angeles and Sacramento. At the same time, the wealth of innovation and job-creating potential in the state’s clean energy economy, an economy with a long track record of clean energy policies and programs, give California a strong foundation for accelerating investment in disadvantaged communities.

The Barriers Study & recommendations

Overall, the set of 11 draft recommendations the California Energy Commission released late last month represent a sound foundation for action. The list includes a number of ideas Environmental Defense Fund (EDF) encouraged in initial comments on which barriers to add and what solutions deserve greater and urgent policy consideration. The study itself is a comprehensive inventory of current low-income programs. What’s more, it’s a discussion of the structural, financial, and policy barriers that currently stand between California households and energy efficiency and renewable energy.

In particular, EDF was pleased to see the commission highlight the broad and scalable impact of the following solutions:

• Community solar –

  Low-income households in California spend more of their paycheck on energy than their middle and high income neighbors.

  This tool enables people to buy into a shared solar resource. The commission rightfully recognized the need for financial incentives that increase access for low-income households. Since community solar can take a variety of forms, the commission should recommend a set of standards and criteria utilities should meet in pilot programs.

• On-bill financing – New financing plans allow customers to install energy-saving projects at no upfront cost. Instead, they can pay overtime on their utility bills. But many low-income households face barriers to access because of credit. Some don’t have access to credit because they are not considered credit-worthy (they don’t have property collateral or sufficient income), while others chose not to apply due to immigration status. Inclusive financing for energy efficiency, like the “Pay as You Save” model EDF partner Roanoke Electric Cooperative utilizes, is a ways to bypass these realities. It is critical that program developers in California look beyond our state borders to innovations across the country –from both urban and rural communities – for guidance and examples.

• Equity indicators – The commission’s recommendation that state-run energy programs develop metrics that measure and report how services are equitably delivered is very promising. This would mean utilities have to report on programs, in part, that will demonstrate their effectiveness in reaching and meeting the needs of all customers, helping to ensure services are fairly distributed and accessible to all. But also, it’s important to make the metrics readily available to the public, and to disclose them via a standard, public reporting process. EDF has seen the effort to establish equity indicators by the Los Angeles Department of Water and Power as a pioneering first step to address barriers to clean energy access and incorporate them into utility business operations.

• Marketing and engagement – This past summer, the Eastside Sol festival brought the message of clean energy to the Eastside of Los Angeles for the second year in a row. This event, along with a number of community-led efforts over the summer of 2016, highlighted the necessity of strong, local ambassadors and organizations to educate, understand challenges, and increase participation in clean energy programming. The California Energy Commission’s recognition that state agencies should work closely with communities is a positive move. The move will be more influential if the requirements for agencies and their partner organizations are defined by transparency and clear, reportable outcomes.

Where to go from here

In addition to the final report and recommendations expected later this month, the solutions will be even more impactful if the California Energy Commission prioritizes them according to commission’s criteria of scalability, sustainability, and accessibility.

Additionally, the commission should measure the potential climate change causing greenhouse gas impacts of the solutions to further elevate their benefit. The study has generated much attention among California clean energy, environmental justice, and community development organizations, among others. We hope the commission embraces the specific and detailed comments of these groups that are often on the ground implementing and delivering services alongside government entities.

In SB 350, legislators recognized ignoring the challenges low-income communities face undermines the boldness of California’s climate and clean energy goals. The Barriers Study is the type of assessment and inventory California needs. The California Energy Commission has given legislators and stakeholders a great start for the next suite of clean energy policy solutions that will set us on the pathway for a clean energy future for all.

Photo source: GRID Alternatives

By Simi George

Yesterday, the Southern California Gas Company filed for permission to resume operations through approved wells at its Aliso Canyon gas storage facility, saying it has completed key safety tests. The facility has been offline over the last year, after it sprung one of the largest gas leaks ever recorded.

Efforts to bring the facility online – and the challenges for the region’s electricity system if Aliso stays offline – underscore the need to address these issues from a broader, longer term perspective.

In addition to supplying gas to homes and businesses, the giant storage field served 17 major gas fired electric generating plants in the region. When a link as important as Aliso Canyon fails, the reliability implications for the electric grid are serious.

Despite official warnings of blackouts, California did not experience any serious electric reliability threats over the summer, thanks to the California Independent System Operator (CAISO) – the entity responsible for keeping the lights on in California – and other agencies, as well as relatively favorable weather and system conditions. But winter could bring new spikes in demand, which means we’re not out of the woods yet.

Electric Generation Plants Served by Aliso Canyon

Short Term Fixes vs. Long Term Solutions

CAISO’s main focus in the immediate aftermath of the Aliso Canyon leak was on short-term reliability, which is understandable. But now that a year has passed, the focus must shift to the long term. CAISO is seeking approval from the Federal Energy Regulatory Commission (FERC) to extend most of its short term measures to address summer 2016 reliability concerns through November 2017.

This means that, subject to FERC approval, short term responses developed through an expedited stakeholder process and intended as temporary measures, are taking on the character of California’s longer term response to the Aliso Canyon incident. The good news is that CAISO has recently announced plans to evaluate certain market design features and consider long term responses to the Aliso Canyon leak through stakeholder processes.

But more needs to be done. And it’s important to start addressing these market gaps now.

Integrating Complex, Shifting Needs

For starters, there is no quick resolution in the cards. Although SoCalGas is asking for permission to restart some operations, Aliso Canyon is unlikely to be returned to historic levels of functionality in the near future. In fact, it may be permanently limited because of regulatory changes.

In addition, California’s gas storage regulatory landscape is poised to change dramatically. The state’s Division of Oil and Gas and Geothermal Resources is formulating new rules for gas storage facilities. Recent legislation, like SB 887, will also increase regulatory oversight of these facilities. CAISO must consider and respond to these developments, so that electric reliability continues to be maintained.

Other agencies have already started considering broader questions. The California Council on Science and Technology is developing a study on the long term viability of gas storage. A federal interagency task force has just issued critical recommendations to reduce the risk of incidents like the Aliso Canyon leak. This broader discussion is incomplete without considering underlying CAISO market design gaps.

The Need for Better Gas Electric Coordination 

A key lesson from the Aliso Canyon incident is the risks of overreliance on gas storage. These risks are exacerbated by the misalignment between the timing of the electric and gas markets.

The basic challenge is that gas fired generators are required to determine how much gas they need before receiving electric dispatch orders from CAISO. California generators schedule their gas for the following day before they bid into CAISO’s day ahead electricity market. Because generators must schedule gas supply before they receive electricity dispatch awards from CAISO, they’re effectively forced to guess their gas needs, increasing the likelihood of imbalance.

Imbalance refers to the difference between how much gas a shipper causes to be delivered into the pipeline relative to how much gas is actually burned by that shipper. Shippers are required to maintain imbalances within a certain band called a tolerance band. When trading imbalances with other shippers isn’t feasible, shippers often depend on storage withdrawals or injections to adhere to the tolerance band, increasing reliance on gas storage facilities like Aliso Canyon.

Getting the Markets Right

The federal interagency report recommends that the timing of information relating to energy bidding and/or gas nomination processes be improved to enhance coordination between the gas and electric systems. CAISO’s position is that the costs of implementing changes needed to better align gas and electric market schedules outweigh the benefits.

But this remains a subjective, qualitative assessment that is not backed by hard numbers. A quantitative analysis would allow CAISO to verify if its assessment is supported by data.

CAISO must also address market gaps relating to price formation. When generating resources aren’t properly compensated to reflect the value of their services to the grid, price signals will be distorted, preventing the right levels of investment in resources needed by the electric grid.

CAISO’s current market design doesn’t allow generators to reflect sub-day variations in fuel costs in their market bids, muting price signals reflecting the true costs of gas fired generation. It also doesn’t allow generators’ actual costs of gas procurement to be reflected in their market bids (a gas price index is used to calculate fuel costs), thereby obscuring price signals in the wholesale electric market.

The Road Ahead

Fixing these and other gaps in CAISO markets would go a long way to addressing the reliability issues raised by the Aliso Canyon incident, and help reduce overreliance on gas storage. If there’s a good time to consider the longer term implications of Aliso Canyon’s limited operability and the underlying market design gaps, it is now. Focusing on these issues is critically important given California’s vision of a cleaner, more renewable electric grid.

 

 

By Guest Author

The Greenlining Institute partners with Environmental Defense Fund (EDF) and is a policy, research, organizing, and leadership institute working for racial and economic justice. They recently released a report highlighting how inclusive policy can make electric vehicles accessible to all. Here at EDF, we know clean energy policies cannot be truly transformative without accessibility across all income levels and among all communities. Indeed, that is the only way we will accomplish our goal of curbing harmful climate change.  

By: Joel Espino, Legal Counsel, The Greenlining Institute

State programs that help low-income Californians access electric vehicles (EVs) mark a big step in our fight against poverty and pollution.

Cars, buses, and trucks are the biggest source of global-warming pollution in California – creating nearly 40 percent of the state’s total emissions. This makes tens of thousands of Californians sick, costs us billions in avoidable health costs, and causes twice as many deaths as traffic-related accidents. Vehicle pollution hurts low-income neighborhoods and communities of color the most because they are more likely to be located near busy roads and freeways, exposing them to dangerous levels of pollution. Paired with the fact that low-income families spend a disproportionate amount of their income on gas and public transit fares, the substantial burden of transportation on our poor communities is clear.

However, if drawing on renewable energy, EVs have the potential to dramatically reduce pollution as compared to their gasoline-powered counterparts and save folks money. From well-to-wheels, EVs produce fewer emissions than gas-powered cars and are cheaper to power and maintain. That’s why in 2014 we at The Greenlining Institute worked with Communities for a Better Environment, Coalition for Clean Air, Environment California, and the Natural Resources Defense Council to pass the Charge Ahead California Initiative. This law works to place 1 million EVs on California’s roads by 2023 and ensure all Californians, especially lower-income households most impacted by pollution, can access clean cars.

We’ve learned a lot from implementing this initiative. Now, those lessons are illuminated in a comprehensive online tool, “Electric Vehicles for All: An Equity Toolkit,” to help policymakers and advocates make EVs a reality for underserved communities by providing tools, tips, and resources. In particular, five important steps can ensure EV benefits reach all communities:

STEP 1: Make EVs Affordable

The first obvious barrier stopping low-income consumers from buying EVs is cost. A new Nissan Leaf costs $29,010, about $9,000 more than a similar gasoline-powered model. And although prices of EVs are dropping fast, low-income consumers still need financial assistance to buy one. Used EVs represent a gold mine of opportunity. For example, a used, reliable, 2012 Nissan Leaf with under 50,000 miles costs $10,000 or less.

Equitable EV policies use tools like vouchers, rebates, and financing assistance programs to bring EV costs down for low-income consumers.

STEP 2: Make EVs Practical and Accessible

When figuring out how to help low-income folks get into EVs, it’s important to find out what kind of EV access makes sense for them. Is the target community in a rural area that relies a lot on individual car ownership to get around? Or is it a dense, urban area with good public transportation – thus less dependent on individual car ownership but potentially benefitting from a car-sharing model? Advocates and officials need to consider the mobility needs of the target community when figuring out what kind of EV access is practical or whether it is needed at all.

Equitable EV policies help place charging infrastructure in underserved communities. These policies also help low-income individuals apply for financial incentives through things like technical assistance and easy-to-use applications. With more charging infrastructure available to more people in more places, like multifamily housing and workplaces, EVs can also serve as assets to the electric grid – by enabling charging at times when electricity is clean and cheap and avoiding charging when the electric grid is stressed.

5 Steps for Making Electric Vehicles Benefit All
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STEP 3: Increase EV Awareness

Many people still know very little about EVs. This is especially true in low-income communities and communities of color in which EVs usually haven’t been advertised.

Effective community engagement regarding EVs will require trusted messengers. Partnering with community-based organizations will help build trust and ensure EV materials and messages are culturally sensitive, relevant, and available in key languages.

Public officials also lack familiarity with EV benefits and incentives that might be available in their areas. To be successful, EV awareness campaigns should educate officials – especially public officials of color or those representing large numbers of low-income communities and communities of color.

STEP 4: Educate Auto Dealers about EVs

Auto dealers act as gatekeepers to EVs and can be important partners in increasing EV access in underserved communities. But too often, auto dealers know little about how EVs work, their benefits, or available incentives. Dealers also make less money on EVs than on gas powered vehicles because EVs need less maintenance and parts. For example, EVs don’t require routine oil changes or parts like air filters and gaskets.

Equitable EV policies help educate auto dealers on EV benefits and incentives, especially incentives for low-income consumers. Additionally, they provide financial incentives to dealerships for selling EVs to low-income consumers.

STEP 5: Diversify the EV Market

As transportation electrification (powering vehicles with electricity) grows, so will jobs in EV manufacturing, repair and maintenance, charging station installation, and other related sectors. Lots of businesses that provide goods and services to EV companies stand to benefit greatly from a growing EV market.

An inclusive, diverse, and equitable EV market must ensure underserved community members have access to job training programs that build in-demand skills and are prioritized through local and targeted hiring. Companies in the EV market must focus on diversifying their entire workforce – from janitors and assemblers to electrical engineers and executives. EV companies must buy services and goods from businesses with diverse owners, such as minority-owned businesses, so the economic opportunities they produce reach as many businesses and people as possible.

Missing the mark on creating a diverse, inclusive, and equitable EV market and clean energy economy can further widen the racial wealth gap in America and lock workers of color out of a chance at economic stability and prosperity. Inclusive clean energy policies can build prosperity and clean the air in communities who bear the brunt of transportation pollution. And in order for them to be truly transformational, clean energy technologies, like EVs, have to be accessible to all members of every community – especially those who stand to benefit the most.

Photo source: Rudy Espinoza

By Tim O'Connor

When the gusher of methane pouring out of the Aliso Canyon natural gas storage field was discovered last October 23, it almost instantly transformed the sleepy Los Angeles suburb of Porter Ranch into the site of one of the biggest environmental disasters in recent history. It would ultimately take four months to stop the massive underground leak.

Now, a year later, the question: What’s been done to fix the problem, and to prevent future blowouts – either at Aliso Canyon, or the 400 similar facilities in more than 30 states? The answer is, while there’s been some progress, it’s not nearly enough.

Crumbling Infrastructure, Weak or Non-Existent Rules

These sites aren’t just a health and safety risk to their neighbors. Methane is a potent greenhouse gas, with 84 times the warming power of carbon dioxide over 20 years. Old age only makes problems more likely – and more expensive when they occur.

The 60-year-old Aliso Canyon facility is one of the largest of its kind, and it was not in good shape when one of its wells started leaking uncontrollably. There weren’t sufficient state or national rules requiring operators to check equipment for damage, or to make timely repairs. Owner SoCalGas has since spent over $700 million on cleanup, and multiple lawsuits have been filed claiming millions more in damages. But even now, because of lax or non-existent policies, it’s unclear whether any laws were actually broken.

That’s because as it stands, there are still no federal safety or environmental rules covering gas storage facilities. Where state regulations do exist, they vary widely in quality and effectiveness. Last week, a federal task force that was convened after Aliso Canyon to look at these problems issued 44 recommendations to bring national policy into the 21st century. That’s an important step, but the trick is turning that list into action.

Patching Holes in the Safety Net

To get the job done, we need concrete state and federal standards, with regulators at both levels working together to fix the safety net. (We also need a set market reforms that reduce the nation’s dependence on gas and gas storage.) Here’s a list of steps that ought to come next:

1. The federal Pipeline Hazardous Materials Safety Administration (PHMSA), one of the agencies on the task force report, is crafting rules regulating gas storage facilities for the first time. It’s imperative that they get the first phase done by the end of the year. (The agency itself recognizes these first steps won’t be enough, and that more robust action is necessary, but it’s vital to get moving now).
2. As a starting point, PHMSA plans to base its rules on guidelines developed by industry. However, these were never designed to act as regulations, or to cover everything that needs to be done at gas storage facilities. For this effort to become anything more than industry self-policing, PHMSA must couple that guidance with active oversight and stronger standards of its own.
3. While federal rules for underground gas storage will be a first, all states enforce basic well construction principles (some have also had specialized storage rules for years) that neither the industry's gas storage guidance nor PHMSA are yet addressing. It is important that PHMSA make use of this state expertise and that it not disrupt the basic state requirements.
4. PHMSA also needs to develop regulatory capacity that it currently lacks. For any new policy to be effective, the agency will need increased resources and additional staff who understand the complexities of gas well engineering, construction and operation.
5. States should enhance their gas storage rules with help from a forthcoming Interstate Oil and Gas Compact Commission and Groundwater Protection Council guidance document with regulatory considerations on the topic.

There’s plenty for California in particular to do at the state level, and that process is also well under way. Although drafts of permanent regulations we’ve seen so far leave room for improvement, the state’s proposed new rules are still likely to be the most comprehensive in the nation, and we expect California's rules to exceed PHMSA's in many areas when they come out early next year.

The agency in charge in California is the Division of Oil, Gas, & Geothermal Resources, known as DOGGR, part of the Department of Conservation. That includes deciding when (or whether) Aliso Canyon can reopen. SoCalGas is reportedly finishing required safety testing of the Aliso Canyon storage wells, and is expected to file for that permission soon. DOGGR needs to take every precaution before allowing injection and production to resume.

The agency has promised to put all data related to the restart decision online; EDF and many others will be watching closely.

While we hope the PHMSA rule is good news for gas storage-related safety and environment around the country, it's going to be a multiyear process to get the federal rule up to the quality level that Americans deserve. In the meantime states and PHMSA will need to work together closely to minimize gaps in coverage, especially on basic but critical topics like well drilling, casing, and cementing – the best way to prevent well leaks is to build wells right in the first place.

There’s been a lot of progress since Aliso Canyon, but there’s still a long way to go before we can rest easy – and there is always room for improvement. Porter Ranch was not the first community hit by this kind of disaster. With a lot of effort and a little luck, we hope to make it the last.